In July of 2011 we received a letter from the company. It said that the $3+ per hour that we as a Union contribute to the pension was going to be ‘borrowed’ by the company until they could be profitable again. Then they would pay it all back. The Union was notified of this the same time and method as the individual members. No contact from the company to the Union on a national level.
This money will never be paid back. The company filed for bankruptcy and the judge ruled that the $3+ per hour was a debt the company couldn’t repay. The Union continued to work despite this theft of our self-funded pension contributions for over a year. I consider this money stolen. No other word in the English language describes what they have done to this money.
After securing our hourly cash from the bankruptcy judge they set out on getting approval to force a new contract on us. They had already refused to negotiate outside of court. They received approval from the judge to impose the contract then turned it over to the Union for a vote. You read that right, they got it approved by the judge before ever showing to the Union.
What was this last/best/final offer? You’d never know by watching the main stream media tell the story. So here you go…
1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5 years. Currently, I make $16.12 an hour at TOP rate of pay in the bakery. I would drop to $11.26 in 5 years.
2) They get to keep our $3+ an hour forever.
3) Doubling of weekly insurance premium.
4) Lowering of overall quality of insurance plan.
5) TOTAL withdrawal from ALL pensions. If you don’t have it now then you never will.
Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.
It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.
That $3+ per hour they steal totaled $50 million last year that they never paid us. They sold $2.5 BILLION in product last year. If they can’t make this profitable without stealing my money then good riddance.
Quick Google search and voila! From April/2012:
Creditors of Hostess Brands Inc. said in court papers the company may have “manipulated” its executives’ salaries higher in the months leading up to its Chapter 11 filing, in what the creditors called a possible effort by Hostess to “sidestep” Bankruptcy Code compensation provisions.
The committee representing Hostess’s unsecured creditors alleges that information it has gathered suggests “the possibility” that the company converted a chunk of its top executives’ pay from performance-based bonuses to salary, “at least in part to sidestep” rules designed to ensure that companies in bankruptcy aren’t enticing their employees to stay on board with the promise of cash, according to documents filed with the U.S. Bankruptcy Court in White Plains, N.Y.
Federal law severely restricts “retention” bonuses that reward executives for sticking with distressed companies. Companies now often craft “incentive” plans that pay executives for hitting specific performance targets to avoid running afoul of the law.
The creditors said Hostess continues to pay the pre-bankruptcy salary increases, which aren’t “contingent upon any aspect of the debtors’ business performance or operations.”
And there you have it!
But, of course, republicans are blaming the union, who didn’t want to take concessions so that the higher ups could line their pockets.
This is the kind of bullshit that was happening at the company I used to work for.
They froze our pay for years, took away our profit sharing, cut contributions to medical benefits, told everyone times were hard and everyone was struggling, and meanwhile the higher ups were cutting themselves nice big bonus checks.
“When a highly respected financial consultant, hired by Hostess, determined earlier this year that the company’s business plan to exit bankruptcy was guaranteed to fail because it left the company with unsustainable debt levels, our members knew that the massive wage and benefit concessions the company was demanding would go straight to Wall Street investors and not back into the company.
“Our members were aware that while the company was descending into bankruptcy and demanding deep concessions, the top 10 executives of the company were rewarding themselves with lavish compensation increases, with the then CEO receiving a 300 percent increase.
“Our members decided they were not going to take any more abuse from a company they have given so much to for so many years. They decided that they were not going to agree to another round of outrageous wage and benefit cuts and give up their pension only to see yet another management team fail and Wall Street vulture capitalists and ‘restructuring specialists’ walk away with untold millions of dollars.
Cast your mind back to February. Five of the nation’s big banks, including Chase and Bank of America, agreed to pay $25 billion to settle state and federal claims over questionable mortgage practices and promised to work harder to help borrowers who were in trouble. To prod the banks, the government said it would give them credits against the amounts they agreed to pay.
So, to the ire of customers who couldn’t get banks to work with them before, banks are now forgiving debts that no longer exist.
It’s bad enough that these letters are inaccurate. But even worse are the tax problems that they may create for people like Ms. Esposito. In most cases, the Internal Revenue Service considers debt that is forgiven to be taxable income. One exception occurs in bankruptcy; when a debt is discharged, it is not taxable.
But the letters sent by Chase and Bank of America clearly warn that the forgiveness will be reported to the I.R.S. If so, these borrowers may have to prove that the banks erred in claiming to have forgiven the debts.
Trip Gabriel at The New York Times ”The Caucus” blog:
Mr. Ryan also cited bankruptcy numbers to make the point that failing businesses mean fewer jobs. “In 1980 under Jimmy Carter, 330,000 businesses filed for bankruptcy,” he said. “Last year, under President Obama’s failed leadership, 1.4 million businesses filed for bankruptcy.”
But he appeared to conflate business bankruptcies and much more numerous personal bankruptcies. Of the 331,264 bankruptcies in 1980, only 43,694 were for businesses, according to the American Bankruptcy Institute.
Of the 1,410,653 total bankruptcy filings last year, 47,806 were business bankruptcies, according to the institute. And, again, the numbers are falling. In 2009, there were 60,837 business bankruptcies. In July, the latest month with complete statistics, business bankruptcies were 22 percent lower than a year earlier, and personal bankruptcies were down 11 percent.
The Gingrich Group bankruptcy proceedings spotlight the remarkable reversal of fortune of the half-dozen organizations associated with Gingrich. The presidential contender recently ended his campaign $4.8 million in debt. A political nonprofit he headed, American Solutions for Winning the Future, which raised $52 million between its founding in 2007 and its dissolution last July, also ended in debt.
Can’t find a tear to shed… Just glad he won’t have a chance to guide the nation’s economy.
Bankruptcy case reveals pre-crash pay for 50 employees that shocks even Wall Street veterans.
Less than a year before the 2008 collapse of Lehman Bros. plunged the global economy into a terrifying free fall, the Wall Street firm awarded nearly $700 million to 50 of its highest-paid employees, according to internal documents reviewed by The Times.
The documents, which were among the millions of pages submitted in Lehman’s bankruptcy, show the list of top earners each were pledged $8 million to $51 million in cash, stock and other compensation. How much, if any, of the stock was cashed in before the bankruptcy wiped out its value couldn’t be determined.
Still, the rich pay packages for so many people raised eyebrows even among compensation experts and provided fresh evidence of the money-driven Wall Street culture that was blamed for triggering the financial crisis.
American Airlines hire Bain to help them negotiate their bankruptcy options - paying Bain instead of contributing to employees’ pension plan. Now….
On Wednesday, February 1, AA announced it intends to cut its labor costs by 20%, eliminate 13,000 jobs, replace its pension plans with 401(k) plans and end company-paid retiree healthcare
Ellie’s birth on Aug. 30, 2007, began a 25-day, $74,000 stay in one of the most expensive places in any hospital. More daunting, it would launch a four-year journey of fear, hope, devotion and grief — a journey made all the more difficult by financial devastation.
Ultimately, it led two middle-class parents with good jobs, two major health-insurance policies and a house in suburbia into foreclosure and bankruptcy.
“To this day,” Simon said, “we still have creditors calling us, wanting to talk to Ellie. They’ll say things like, ‘We want to discuss how she’s going to take care of this overdue bill.’ I just lose it.”
Ellie Sutherland died June 26. She was two months shy of her fourth birthday.
We still need to fix these problems and Medicare’s problems by simply opening Medicare to all citizens. HR-676: Expanded and Improved Medicare for All.
An ABC report shows that companies bearing Donald Trump’s name have declared bankruptcy four times, in 2001, 2002, 2004 and 2009.
Sounds like the perfect resume for a Republican candidate. Matching the moral and intellectual bankruptcies of the GOP with actual financial bankruptcies.